On May 16, 2018 the Enterprise Act 2002 (Share of Supply Test) (Amendment) Order 2018 (SI 2018/578) was published. This amends section 23 Enterprise Act 2002, which sets out the criteria for a merger to be a “relevant merger situation”, and so qualifying it for investigation by the Competition and Markets Authority.
Currently under the Enterprise Act, intervention in a merger can only take place if the transaction meets certain thresholds, including that the merger takes the merging parties’ combined share of supply to 25 per cent or more (or increases an existing share of supply of 25 per cent or more). Article 3 of this Order amends the share of supply test so that, in cases where the enterprise being taken over is a “relevant enterprise”, that test is additionally met if the relevant enterprise has a 25 per cent share of supply of goods or services in the UK before the merger. The relevant goods or services for this purpose are those by virtue of which it qualifies as a relevant enterprise.
Article 4 inserts a new section 23A into the Enterprise Act to define a “relevant enterprise”. This definition covers enterprises that are involved in specified activities in connection with military or dual-use goods that are subject to export control, computer processing units and quantum technology.
The Order will enter into force on June 11, 2018, with the amendments it introduces only applying in cases where enterprises cease to be distinct after the Order comes into force.
(The Enterprise Act 2002 (Share of Supply Test) (Amendment) Order 2018 16.05.18)